Settlement services - Thailand

Pre-matching service

The table below summarises CBL's pre-matching service for external settlement instructions, as well as the pre-matching method and start time in the market. For details of CBL's pre-matching services, see Pre-matching services for external settlement instructions.

Procedures for domestic counterparties

a. Clients must inform their counterparties to include Clearstream’s segregated depository account number, 3120000314422, in the Seller/Buyer Safekeeping Account field :97A::.

Allowed countervalue difference

A maximum difference in counter value of THB 800 is allowed for matching and settlement of against payment transactions with domestic counterparties.

Specific settlement rules / settlement restrictions

Against payment transactions with domestic counterparties can only be effected in THB for all eligible securities.

Equities

Clients of Clearstream must indicate the relevant reason code in field :22F::SETR// (in Sequence E) or Type of Settlement in Xact Web Portal of their domestic FOP instructions, related to equities, when conducting securities borrowing and lending activities with domestic counterparties:

Example:

:22F::SETR//SECB or :22F::SETR//SECL

Should there be any discrepancy or need for clarification on such domestic FOP instructions, the TSD may follow-up with relevant parties on a case-by-case basis. Clearstream will not assume any liability if clients do not comply, or have not communicated in due time, with the request for additional details in relation to such domestic FOP instructions by the TSD.

Debt securities

To settle and safekeep Thai issued debt securities, clients are requested to take note of the following:

1. Obtention of a Legal Entity Identifier

All investor types in Table A (excluding individual investors), attached below, are required to obtain a Legal Entity Identifier (LEI).

Clients are requested to obtain and provide Clearstream with the LEI of the ultimate beneficial owner (UBO). The LEI and other UBO details are to be included in the MT599, described in point 3 below.

2. Account opening requirements

Clients of Clearstream who wish to hold Thai issued debt securities for underlying ultimate beneficial owners (UBOs) must open an additional sub-account per UBO in Clearstream ’s books. This will be in addition to the client’s existing main Clearstream account.

Note a: The requirement for additional Clearstream sub-accounts per UBO is to distinguish segregated third party assets from proprietary assets on the Thai link and facilitate the automated daily disclosure reporting of UBOs holding Thai issued debt securities.

Note b: Additional Clearstream sub-accounts are not required for those clients that are holding Thai debt securities as proprietary assets.

Please refer to the CBL Client Handbook (Section 2.2 - “Opening additional CBL accounts”) for further details on how to open the additional account.

Account opening requests for UBOs that are individuals will not be accepted.

There will be no requirement to open segregated cash accounts per UBO. Clients may continue to use Clearstream 's existing omnibus cash account in Thailand.

3. Submission and registration of UBO details

Clients are requested to send Clearstream a Swift MT599 free-format message in order for their UBO details to be registered with the BOT, as per the BOT’s Bond Investor Registration (BIR) requirements.

QUOTE

Attn: Clearstream Account Admin Singapore

Please take this MT599 as our request for Clearstream to register the following UBOs with the Bank of Thailand.

UBO Name: <this should be the same as the name used in the LEI>
Investor Type: <enter the UBO Investor Type code as per Table A, attached below. For example: 468011>
LEI: <the UBO LEI>
CBL Account Number: <this should be the account opened for the UBO in Clearstream’s books>

UNQUOTE

Clients are liable for the usage of any safekeeping accounts obtained through Clearstream. Clearstream shall bear no responsibility for any illegitimate or erroneous use - for any trading or other purpose - of such safekeeping accounts. Clearstream does not validate whether the safekeeping accounts that clients use in their settlement instructions sent to Clearstream represent the legitimate investor who ordered the underlying transaction. Clearstream shall therefore not be responsible if the client uses a safekeeping account belonging to an investor other than the investor on whose behalf the relating transaction has been or was deemed to be executed or settled.

4. Clearstream client domestic (external) settlement instructions

Counterparty LEI

When settling outside of Clearstream in the domestic market, the counterparty (in this case, counterparty is either the Ordering Party or Beneficiary) LEI must always be mentioned in the narrative of against payment and free of payment settlement instructions as follows:

:70E::DECL// of the DEAG/REAG in sub-sequence E1 in Xact via Swift and Xact File Transfer; Declaration Details in Xact Web Portal, as per the below format:

“NNNNNNNNNNNNNNNNNNNN” (the 20-character, alpha-numeric code representing a LEI)

Example:

:70E::DECL//549300OL514RA0SXJJ44

Deal Price

The deal price must always be mentioned in the client domestic against payment settlement instructions and to be expressed as a yield (YIEL), percentage (PRCT) of par or an actual amount (ACTU) per unit.

Deal price is not required for free of payment instructions.

Note: It is still a mandatory requirement to include the Ordering Party’s or Beneficiary’s segregated depository account number at TSD in all domestic (external) settlement instructions in field :97A::SAFE// of the SELL/BUYR in sub-sequence E1 in Xact via Swift and Xact File Transfer; Party Safekeeping account in Xact Web Portal.

5. Clearstream client internal settlement instructions

When settling inside of Clearstream (internal settlement), the counterparty LEI and segregated depository account number at TSD are not mandatory.

The deal price must always be mentioned in the client internal against payment settlement instructions and to be expressed as a yield (YIEL), percentage (PRCT) of par or an actual amount (ACTU) per unit.

The deal price is not required for free of payment instructions.

Bridge settlement

Bridge transactions in Thai domestic securities are not possible. Bridge transactions in THB-denominated Eurobonds are possible.

Internal settlement

Internal settlement of Thai domestic securities and Eurobonds denominated in THB is possible against THB or any other Clearstream-eligible currency.

Pending settlement

Clients with ISINs not impacted by pending settlement will receive settlement confirmations after 15:00 Thai time / 09:00 CET winter/ 10:00 CET summer.

After 15:00 Thai time / 09:00 CET winter/ 10:00 CET summer, clients with impacted ISINs will have the original instruction cancelled, confirmed settled quantity credited and full amount for payment of securities debited. For the positions that are still in pending settlement status, the originating defaulted selling broker has until SD+3 to deliver the remaining securities.

When the pending settlement position has resolved (that is, the originating defaulted selling broker has delivered the remaining securities), clients will be credited with the remaining quantity. If the pending settlement position is not resolved on SD+3 (that is originating defaulted selling broker cannot deliver the remaining shares) then a cash settlement will be triggered.

Note: If Clearstream ’s depository is identified by the Thailand Clearing House (TCH) or the Thailand Securities Depository (TSD) as having no holding positions under pending settlement status (that is, not being a pending receiver), then clients will receive settlement confirmations after 14:15 Thai time / 08:15 CET winter/ 09:15 CET summer.

The TCH will trigger cash settlement on SD+3 (counting from SD of the originating defaulted selling broker) to terminate outstanding pending settlement if the originating defaulted selling broker still cannot deliver the shares to TCH. If cash settlement is triggered, the client identified as the pending receiver will receive cash settlement instead of securities.

Local shares received by Clearstream clients

Local shares received by Clearstream clients are sent out on SD+1, for conversion into foreign shares. On receipt of conversion confirmation, the holdings are booked from local shares ISIN into foreign shares ISIN.

Note: Shares pending conversion are not blocked and are available for settlement.

Deliveries from CBL

Cash proceeds remitted by cheque are credited with good value but become final only after clearing on SD+1. The client therefore runs the risk of such payments being reverted on SD+1. If the payments are reversed, the cash proceeds will be debited to the client’s account.

To avoid this risk, clients are encouraged to ask counterparties to effect such payments via BAHTNET.

Back-to-back processing

Back-to-back processing is available for transactions in all dematerialised securities eligible in this market. If both the client and the domestic counterparty meet their settlement obligations and fulfil the market's back-to-back requirements within the relevant deadlines, the linked receipt and the linked delivery will settle with same-day value. To benefit from this functionality, clients must ensure that their back-to-back instructions are formatted as described below:

a. The reference (16x) must neither start nor end with a single slash ‘/’ nor must it contain two consecutive slashes ‘//’.

Note: Following the implementation of pending settlement in Thailand, same day turnaround transactions/back-to-back processing will have higher risks and may impact/delay onward deliveries.  Clearstream shall, therefore, not be responsible for any loss, claim, liability and/or expense in relation to such turnaround transactions/back-to-back processing.

Clients who proceed with turnaround transactions/back-to-back processing are deemed to be aware of the higher risks and/or impacts/delays on onward deliveries and undertake to hold Clearstream harmless and indemnify Clearstream from any such loss, claim, liability and/or expense in relation to the turnaround transactions/back-to-back processing.

RTGS-DVP

The RTGS-DVP system is a link between the TSD and the BOT that enables real-time gross settlement, outside the net settlement system of the TSD, for big-lot trades.

When RTGS-DVP is required, clients must include the following details in their instructions:

Note: RTGS-DVP can be used for against payment transactions only. Free of payment transactions that attempt to use RTGS-DVP will not be rejected but will automatically be routed for settlement to the TSD net settlement system.

Management of failed instructions

Settlement instructions with domestic counterparties not settled on requested settlement date (SD) are not automatically cancelled. Clients who wish to cancel such instructions will have to send in a cancellation to do so. Otherwise, the depository shall automatically cancel the instruction which remains unmatched at the end of the 30th business day after the first attempted settlement date.